Feather River State Bank, one of California's most prolific farm lenders, is getting into the leasing business to keep itself busy through the fallow winters.

Officials at the $215 million-asset bank, based in Yuba City, last week signed a letter of intent to purchase EPI Leasing Co. for an undisclosed price. The new company will become a subsidiary of Feather River and be the bank's first meaningful push outside farm lending.

"This is a totally new venture for us," said Annette Bertolini, senior vice president. "We're a pretty conservative bank."

EPI originates about $12 million of leases each year, she said, mostly in equipment leases for small and midsize businesses.

She said EPI, based in Citrus Heights, Calif., sells lease financing nationwide, but mostly in the West. In anticipation of the sale, the leasing company is hiring its first agriculture lease specialist, and the bank hopes to make big-ticket farm equipment leases available to its customers.

Feather River had about $11 million in leases on its books, but those were bought through brokers as part of the bank's effort to diversify its asset base.

Feather River's customer base is mostly farm-related, and the bank has one of the most agriculture-concentrated loan portfolios in the Golden State, even among banks in the fertile Central Valley.

The niche has been highly profitable for Feather River, ranking it among the most high-performing banks in the West. It returned 1.74% of its assets in 1995 and hasn't returned less than 17% of its equity in three years.

In the winter, after harvest time, the walnut, prune, peach, and tomato farmers pay off their loans. Just last year, for example, Feather River's loan-to-deposit ratio went from 81% at the end of June 1995 to 66% by the end of the year.

"During those off-peak periods, we are extremely liquid," Ms. Bertolini said. "The thought the EPI purchase would help fill the gap in those months."

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